If Cicis manages the Cicis restaurant on an interim basis, who is liable for debts incurred during that period?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
We may (but are not obligated to) assume such interim management of your Restaurant; provided that (i) our interim management of your Restaurant will not relieve you of your obligations under this Agreement; (ii) we will not be liable for any debts, losses, costs, or expenses incurred in the operation of your Restaurant during any such period of interim management; (iii) we will have the right to charge a reasonable fee for our management services, plus the direct out-of-pocket costs and expenses incurred in the operation of the Restaurant; and (iv) you will, and hereby do, indemnify and hold us harmless against any and all judgments, fines, losses, liabilities, costs, amounts paid in settlement, and reasonable expenses (including, but not limited to attorneys' fees) incurred in connection with our interim management of your Restaurant, except by reason of our gross negligence or willful misconduct.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis' 2025 Franchise Disclosure Document, if Cicis assumes interim management of a restaurant, the franchisee remains responsible for all financial obligations. Specifically, Cicis will not be liable for any debts, losses, costs, or expenses incurred during their period of interim management.
This arrangement protects Cicis from financial risks associated with temporarily managing a restaurant, ensuring that the franchisee retains ultimate financial responsibility. However, Cicis retains the right to charge a reasonable fee for its management services, in addition to covering direct out-of-pocket costs and expenses incurred during the restaurant's operation.
Furthermore, the franchisee is obligated to indemnify and hold Cicis harmless against any judgments, fines, losses, liabilities, costs, settlement payments, and reasonable expenses, including attorney's fees, that arise from Cicis' interim management. The only exception to this indemnification is in cases of Cicis' gross negligence or willful misconduct. This comprehensive protection underscores that the franchisee bears the financial burden and legal risks during the interim management period, except in cases where Cicis is directly at fault through gross negligence or willful misconduct.